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U.S. Department of Education: Promoting Educational Excellence for all Americans

Subgrants to LEAs (Sec. 300.705(a))

(originally published on December 1, 2008 – 73 FR 73006; effective date – July 1, 2009)

Comment: A few commenters supported the proposed changes to Sec. 300.705(a) clarifying that States are required to make a subgrant under section 611(f) of the Act to eligible LEAs, including public charter schools that operate as LEAs, even if the LEA is not serving any children with disabilities, because all LEAs have a responsibility to identify and provide services to children with disabilities. The commenters stated that the Department should ensure that a newly created LEA not serving any children with disabilities in the first year would still be eligible for some IDEA funds (e.g., based on enrollment and the number of students in poverty) to allow the new LEA to conduct child find activities and serve any students who are identified as eligible for special education services later in the year.

Some commenters opposed this provision and recommended that given the current level of IDEA Federal funding, funds should be used for direct services for students who are currently eligible for special education and related services. Additionally, one of these commenters expressed concern that Sec. 300.705(a) would require revising current State and local funding processes, which would place accounting and administrative burdens on both State and local systems. A few commenters stated that the proposed change to Sec. 300.705(a) is unnecessary because States have been successful in ensuring that small school districts receive allocations when they enroll a student with a disability. Lastly, one commenter suggested that the proposed changes could be handled through administrative guidance, rather than regulations.

Discussion: Section 300.705(a), consistent with section 611(f)(1) of the Act, requires each State to provide subgrants to LEAs, including public charter schools that operate as LEAs in the State, that have established their eligibility under section 613 of the Act. Section 613(a) of the Act states that an LEA is eligible for assistance under Part B of the Act for a fiscal year if the LEA submits a plan that provides assurances to the SEA that the LEA meets each of the conditions in section 613(a) of the Act. There is no requirement in section 613(a) of the Act that an LEA must be serving children with disabilities for an LEA to be eligible for a subgrant. Requiring States to make a subgrant to all eligible LEAs, including public charter schools that operate as LEAs, will ensure that LEAs have Part B funds available if they are needed to conduct child find activities or to serve children with disabilities who subsequently enroll or are identified during the year. Regardless of the level of funding made available for the Part B program under the Act, neither the Act nor the implementing regulations require that Part B funds be spent only for direct services for students who are currently eligible for special education and related services. As in the past, LEAs may use Part B funds for direct services to children with disabilities or for other permissible activities, such as child find, professional development, and more recently, for coordinated early intervening services in accordance with Sec. 300.226.

The Grants to States and Preschool Grants for Children with Disabilities Programs are forward-funded programs and LEAs generally receive a subgrant at the beginning of the school year to cover the costs of providing special education and related services to children with disabilities during the school year. Ensuring that all LEAs, including those that have no children with disabilities enrolled at the beginning of the school year, have section 611 and section 619 funds available will enable LEAs to meet their responsibilities under the Act during the school year if a child with a disability subsequently enrolls or a child is subsequently identified as having a disability.

We understand the commenter's concern that this change in the regulations may require States to revise their procedures for distributing Part B funds, and that there may be some administrative burden associated with these changes. However, the importance of ensuring consistency across States concerning the distribution of section 611 and section 619 funds outweighs the potential administrative burden. As previously stated in this preamble, making these funds available to LEAs is critical to ensure that each LEA is able to fulfill its responsibilities under the Act. We agree with commenters that some States have been successful in ensuring small LEAs receive allocations when they enroll students with disabilities after the school year has begun. However, given that the Act and the implementing regulations are silent on whether an SEA must make a subgrant to an LEA that is not serving any children with disabilities, clarification is necessary in Sec. Sec. 300.705(a) and 300.815 to remove any ambiguity in this regard. Revising the regulations, rather than remaining silent on the issue or issuing guidance, will ensure that all States treat LEAs in the same manner, including those LEAs that are not serving any children with disabilities, when allocating Part B funds.

Changes: None.

Comment: A few commenters recommended that the proposed regulations be modified to give States the option of making subgrants to eligible LEAs, including public charter schools that operate as LEAs, when an LEA is not currently serving any students with disabilities. The commenters stated that States have different needs and some have policies in place to help new charter schools meet their child find obligations.

Discussion: We recognize that States are in a unique position to assist new LEAs, including charter schools that operate as LEAs. However, requiring States to make a subgrant under section 611(f) and section 619(g) of the Act to eligible LEAs, including public charter schools that operate as LEAs, even if the LEA is not serving any children with disabilities, ensures consistency across States and an equitable distribution of Part B funds. We also recognize that some States may not assign child find responsibility to public charter schools that operate as LEAs. However, all LEAs, including public charter schools that operate as LEAs, have other responsibilities under the IDEA that may need to be carried out during the school year, such as serving a child with a disability who is identified during the school year. It is the Department's position that it is necessary to require States to make (rather than give them the option of making) subgrants to eligible LEAs not currently serving any students with disabilities, to ensure that all States treat LEAs in the same manner, including those LEAs that are not serving any children with disabilities, when allocating Part B funds.

Changes: None.

Comment: One commenter recommended that the Department withdraw the proposed changes and add, if necessary, a new paragraph in Sec. Sec. 300.705 and 300.815 that would allow a new or expanded charter school to receive an allocation under Sec. Sec. 300.705 and 300.815, respectively, if the school demonstrates to the SEA that the school is serving children with disabilities in accordance with the requirements of Part B of the Act within the time frame established by the SEA under 34 CFR 76.788(b)(2)(i), which provides that once a charter school LEA has opened or significantly expanded its enrollment, the charter school LEA must provide actual enrollment and eligibility data to the SEA at a time the SEA may reasonably require.

Discussion: We do not agree that the change suggested by the commenter is necessary. An eligible public charter school LEA has the responsibility to meet the requirements of the Act during the school year regardless of whether the LEA is serving children with disabilities at the time the subgrant is calculated based on actual enrollment and eligibility data. In recognition of these responsibilities, requiring an SEA to make an initial subgrant to a new or expanded public charter school LEA is appropriate, even if it is not serving any children with disabilities at the time actual enrollment and eligibility data are provided to the SEA.

Changes: None.